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How do you take on the dominant player in your industry, like Microsoft? Well, you aren't going to easily outspend or out market them. Microsoft has a tremendous amount of momentum and software assets creating a huge barrier for competitors. They have more cash on hand than the GNP of some nations. And Microsoft has some of the best and brightest working for them. Sound like a bleak picture to compete against?

You can't replicate a monopoly like Microsoft. You have to take a different approach. This is much the same situation I faced when creating products to compete with Cisco, another 800 pound gorilla. You have to take an approach that is difficult for Microsoft to compete with, or one they can't dominate and control. The answer is open source, and that's exactly the approach Google has taken.

In a hugely insightful piece, Glyn Moody on Redmond.com has effectively described Google's open source strategy to compete against Microsoft. I think the guys at Redmond.com do some very good writing and this is one of the best I've come across.

Here's a bit of my own analysis coupled with some of the ideas Glyn shared in his article.

Don't Use Your Competitor's Products To Build Your Company

Top to bottom Google runs their business on open source GNU/Linux. Free. No licensing costs. Add MySQL as the database -- even better. Google can expand their business using commodity Intel/AMD hardware and keep software costs very low, without adding revenues to Microsoft's bottom line. It would probably be tough for someone like IBM to say they've done the same to the degree of a Google.

Hire The Best Open Source Insiders

Google's hired great open source developers from projects like Linux, Firefox, Samba and Apache. They all still have ties back into those projects. Now these key hires can help influence open source development projects that happen to indirectly benefit Google. Plus, open source developers would love to help improve their projects and displace Microsoft. A win-win.

Don't Lose Your Place At The User's Table

The browser is Google's delivery platform to end users. If Firefox on Windows platforms goes the way of the Netscape browser, Google is sunk. Microsoft can pretty much do whatever they want to IE and cut Google off at the knees. The Mozilla Foundation benefited from $66 million in revenue from Google in 2006. No surprise then why Google is the default search engine in Firefox. That revenue helps pay to keep competitive Firefox software in the market. Firefox is the only thing between IE becoming the only browser running on Windows desktops.

Create and Sponsor Open Source Developers

If software developers aren't developing on open source software, then they are likely writing software on Microsoft's technology. Google's fostering the creation of more open source developers who can either work on Google projects or go out in the world and help the propagation of open source in other companies.

Hit 'Em From All Flanks

The enemy of my enemy is my friend. Hello IBM, Sun and Oracle. While Google may not be lining up directly with these companies, they also are taking on Microsoft through their own open source efforts. As long as Microsoft is as dominant is they are today, the big guys only need to concentrate fire on Microsoft and leave each other alone, at least for now.